Thursday, August 03, 2006

"Don't blame me..."

"...but I'll take all the credit when interest rates go down."

It's the way it goes with bloody politicians isn't it. In reality, world events, commodity prices, the global economy are really the factors behind interest rates.

When rates are high that's exactly what the politicians say - it's beyond their control.

Yet the moment rates come down they scramble over each other to take the full credit..."It's all because of my good economic management."

Howard by an accident of timing came to power when world interest rates were at historically low levels. There was 1% in the USA, zero percent on Japan, two or three percent was the norm in the industrialised world. He fell into it, he didn't create it.

On the other hand Labor were unfortunate to be in power when the world's interest rates were at historical highs.

In both cases they could fiddle at the edges but that's about all.

But the spin is relentless. Claiming credit, blaming others, being creative with the presentation of the facts, such as "... 3 per cent lower than when the Government was elected (in 1996) and 10 per cent lower than the peak under the Labor Party," Mr Costello told a specially convened media conference in Sydney. The Treasurer denied the Coalition had betrayed voters or that the third 0.25 per cent interest rate rise in 12 months - taking rates to their highest levels in five years - reflected badly on the Government's election pledge to keep rates low.

He also pinned the blame for higher rates on the last Labor government, more than a decade ago.

Mr Howard, while admitting his regret about the interest rise, said it was inevitable.

As Ross Gittins said in Sydney Morning Herald:

So don't fall for John Howard's excuse that no government can stop cyclones or control the world oil price. He's just trying to divert attention from a promise a more scrupulous politician would not have made - to "keep interest rates low".

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